1. Field of the Invention
The present invention generally relates to on-line sales promotions and, more particularly, to an on-line system for differential rewards with user profiling.
2. Background Description
Various forms of reward schemes are currently being used in practice; e.g., buy one get one free, coupons offering discounts on various products and services, mail-in rebates, price markdowns, buy suit get tie free, etc. However most of the reward schemes are untargeted; i.e., same markdown is available to everyone.
Using coupons it is possible to give targeted rewards, but the processing of coupons is time consuming and expensive, comprising of the coupon distribution costs incurred by the manufacturer, his or her agent or the retailer, the coupon management overhead incurred by the user or a third party, the clearing expenses for redeemed coupons and the user profiling costs for targeted coupon distribution. There are additional issues with both paper and electronic forms of coupons. The paper coupons require a user to cut the coupons, store them and carry them to a physical store for redemption, allow limited targeting and has larger distribution costs. On the other hand, various kinds of frauds are possible in an electronic coupon generation, presentation, redemption and clearing system. These include double spending of electronic coupon at same or different sites by the customer, tampering of electronic coupons to modify the validity period, discount amount or conditions, creation of a fake electronic coupons, trading of coupons between customers, duplication of electronic coupons by the retailer and claiming them from the manufacturer, retailer colluding with other retailers to exchange the list of redeemed coupons, tampering of electronic coupons by the retailer. These frauds often defeat the objective of targeting or limiting the number of coupons by the coupon issuer and also make it difficult for the coupon issuer to estimate coupon redemption rate or budget for a coupon campaign.
Haggling and price mark downs has been in practice since ages by physical stores. However, doing the same for online stores is not a trivial task. There are various online e-commerce sites such as xe2x80x9cwww.amazon.comxe2x80x9d, xe2x80x9cwww.exactis.comxe2x80x9d and xe2x80x9cwww.fashionmall.comxe2x80x9d that offer targeted discounts to their customers, some using complex mathematical tools to improve price markdown and inventory decisions. However, none of these sites provide a solution that can be used by a plurality of manufacturers to provide targeted markdowns or differential rewards to the users, through a plurality of online or physical retail stores.
Several centralized service provider based systems have also been proposed for giving merchandise discounts. U.S. Pat. No. 5,185,695 to Pruchnicki for xe2x80x9cMethod and System for Handling Discount Coupons by Using Centrally Stored Manufacturer Coupons in Place of Paper Couponsxe2x80x9d describes a method and system for handling merchandise discounts by using centrally stored discount list in place of paper coupons, to save costs of printing and distributing and clearing paper coupons. The method and apparatus includes a central processor that receives information of product type, validation period and discount value from manufacturers and produces a central discount list of available discounts. The central list is transmitted to retailers. The retailers produce a local discount list based on the central list containing only those manufacturers and product type which the retailer holds for sale. The customer buys a product and as the product is moved through the checkout station, merchandise discount, if any applicable, is deducted from the retail price. The central processor directly bills the manufacturer or transfers funds. This solution does not provide any form of targeted discounts; they are just giving discounts to all customers purchasing the discounted products. The untargeted markdown or reward has a disadvantage of giving discounts even to the customers who would have otherwise purchased the product at its original retail price, thereby incurring loss equal to the discounted amount.
U.S. Pat. No. 5,924,080 to Johnson for xe2x80x9cComputerized Discount Redemption Systemxe2x80x9d describes a similar method of giving merchandise discounts by using a membership system comprising of a centralized system provider, multiple manufacturers, multiple merchants and multiple customers. Each customer gets a membership card having a unique customer identification (ID) that is also stored at provider""s end. Manufacturers provide information on merchandise and discounts to the centralized system provider. Customers become aware of the discounts by some means such as media advertisement and buy the merchandise at a member merchant store. Merchant scans the merchandise ID and customer ID and sends these online to the centralized system provider system. The centralized system provider verifies the customer membership, the discounts on the items being purchased by the customer and sends the discount amounts to the merchant computer.
U.S. Pat. No. 5,857,175 to Day et al. for xe2x80x9cSystem and Method for Offering Targeted Discounts to Customersxe2x80x9d also describes a card based system for presenting customized special offers to customers wherein the special offers may be targeted. These systems offer target discounts to the customers wherein the customers do not have to present any coupons or file rebates. Also the merchants do not have to process any coupons or discounts and these systems support multiple manufacturers. However, they require the customer to become a member of the system and carry a machine readable membership card for identifying himself or herself, the retailers to have a card reader for reading machine readable customer card information, the manufacturers and their promotion agents to issue membership cards to their customers and provide only limited dynamic user profiling. Also in these systems the type of targeting that is possible is limited; e.g., if a manufacturer or service provider wishes to target the rewards based on the users"" Internet service provider (ISP), it would require issuing membership cards to all the applicable users. Additionally, the distribution of physical cards may be cost intensive and require enormous amount of effort. Also, card based solutions can not be extended for online stores in a straight forward manner.
It is therefore an object of the present invention to provide an on-line methodology and system for giving differential rewards to users that supports multiple manufacturers and multiple reward distribution agents.
It is another object of the invention to provide an on-line system for giving differential rewards that supports diverse ways of targeting and profiling, including dynamic user profiling.
It is a further object of the invention to provide an on-line methodology and system for giving differential rewards wherein the users need not carry any coupon or card or even make any conscious effort for availing themselves of the intended offer or even be aware of the reward scheme; i.e., the reward may be a surprise gift.
According to the invention, there is provided a methodology and system is given here wherein a plurality of reward scheme owners can give differential rewards, through a plurality of reward distribution agents, to various users possibly based on the user profile. The reward scheme owner may be a seller, a manufacturer, a sales promotion agent or even an intermediary. Similarly, the reward distribution agent may be an on-line or a physical retailer, a broker, a seller or an intermediary. Also the users may be consumers, businesses, brokers or other intermediaries. In one specific case of this invention, a reward scheme owner defines a plurality of reward schemes, including at least one differential reward scheme giving different rewards to different users. The reward scheme owner communicates these to a central reward scheme database server. The reward scheme owners may or may not advertise these schemes. The user visits an online or a physical store. The store acting as a reward distribution agent dynamically profiles the user, queries the central reward scheme database server if the user profile meets the criterion for one or more rewards and offers the applicable rewards to the user. The store later receives reimbursement for the rewards offered to various users, from the reward scheme owners. This invention may be used for offering targeted or differential discounts on different products and services, offering different promotional schemes on different combination of products, giving loyalty points, electronically distributing prizes, free samples, product warranties, tie-in promotions, cross selling, up selling, premiums, memberships, card discounts, organizing contests, sweepstakes, games and offering other similar rewards.
Additionally, in the present invention, most often the profiling can be deferred till the user actually becomes eligible for the reward. In contrast, for coupon based promotions, the profiling has to be done before issuing the coupons to the users. Similarly, for membership card based solutions, some profiling must be done before issuing the card. If the user does not use the coupon or does not avail the discount offered based on the card, the profiling effort is wasted. Hence, this invention may save valuable profiling effort in a lot of cases.